View full case

WOOD TECHNOLOGY CORPORATION v. EQUITABLE BANKING CORPORATION

FACTS:

The case involves a Complaint for Sum of Money filed by respondent Equitable Banking Corporation against the petitioners, Wood Technology Corporation (WTC), Chi Tim Cordova, and Robert Tiong King Young. The complaint alleged that WTC obtained a loan in the amount of US$75,000 from the respondent, with Cordova and Young acting as sureties. Respondent bank made a demand for payment, but petitioners failed to comply. Petitioners argued in their Answer that the promissory note did not specify the due date for payment, and therefore, the filing of the complaint was premature and failed to state a cause of action. They also claimed that the promissory note and surety agreement were contracts of adhesion with unreasonable terms on interest, penalties, charges, and attorney's fees. The trial court rendered judgment on the pleadings in favor of the respondent, and the Court of Appeals affirmed the decision. The petitioners raised several issues on appeal, including the validity of the judgment on the pleadings and the alleged unfair conditions in the promissory note.

ISSUES:

  1. Whether or not the answer of petitioners with special and affirmative defenses fails to tender an issue or admits the material allegations in the Complaint so as to justify the rendition of judgment on the pleadings by the trial court;

  2. Whether or not petitioners should have been given the right to present evidence on their special and affirmative defenses;

  3. Whether or not the promissory note is a contract of adhesion containing unreasonable conditions which petitioners signed without real freedom of will to contract the obligations therein; and

  4. Whether or not the filing of the complaint was premature and/or the complaint failed to state a cause of action.

RULING:

  1. The Court held that the appellate court did not err in affirming the RTC's judgment on the pleadings. The Court ruled that petitioners' Answer failed to tender genuine issues and admitted the material allegations in the Complaint. Therefore, the judgment on the pleadings was correctly rendered by the trial court. The Court also held that petitioners were not entitled to present evidence on their special and affirmative defenses since these could be resolved based on the pleadings and applicable laws and jurisprudence.

PRINCIPLES:

  • The court's policy is to promptly and expeditiously resolve cases and controversies.

  • Rules of Court seek to shorten the procedure to allow for the speedy disposition of a case.

  • Demurrer to evidence, judgment on the pleadings, and summary judgments are instances where a full blown trial is dispensed with and judgment is rendered on the basis of the pleadings.